Is Blockchain really useful for the banking sector?
When it comes to exchanging information, and money, Blockchain offers a very high level of security.
Harvard Business Review claimed that blockchain would do to the banking sector what the internet did to media.
When it is about banking and financial institutions, blockchain has that potential to solve a lot of issues in the industry. Blockchain technology holds all the attractive characteristics needed by a reliable technology that involves money matters. It is cheaper, transparent, decentralised, safe and secure.
Also, it lets its users take advantage of the transparent network infrastructure along with low operational prices through decentralisation.
Such unique characteristics of blockchain technology make it reliable, promising and in-demand solution for the banking as well as the finance industry.
So, Why Use Blockchain for Banking Industry?
The existing banking systems are reliable on paper as well as the outworn process. The hour requires to have an upgraded system that is embedded in reliable technology which could keep the frauds, scalability and security issues at bay.
The decentralised nature of blockchain technology can give banking systems the much-needed edge which they are on the lookout for.
No denying that banks can’t be termed as independently operating entities as any transactions made through them involves intermediaries. Furthermore, the cost through which money is transferred on an international scale can still take up to 5 days and that too with the risks involved.
With Blockchain technology in place, banks would be able to do the transfers quickly without even having to worry about the risks as the system would be self-sufficient to resolve it all on its own.
The world is getting to be digital all along. With this progress, even small payments and transactions are taking place digitally. The economic activity cost is growing, and there’s no doubt that the cost will keep skyrocketing in the coming days.
The Blockchain technology has proven to be a boon in this regard. The technology makes even small transfers feasible and fast along with no or lower fee as well as scalability of the transactions.
Other than the banks, financial services are continually evolving their systems with this latest technology for securing the markets by offering economically available services at the nominal costs.
Financial institutions, other than the banks, need to look forward to adopting the new blockchain technology to secure their place in the ecosystem.
In spite of the strict jurisdictions across the banking sector, financial institutions have begun to realise the true potential of blockchain technology, after seeking the popularity of cryptocurrencies in the market today. A few banking giants have already begun to conduct the tests to find out the best possible use cases of this decentralised technology for their business processes.
Furthermore, some of the organisations are heavily investing in such tests and researches which are conducted by the startups for developing blockchain based solutions.
With Blockchain entering the current banking system, many problems could be resolved while making the system more easy to access, transparent and reliable.